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    acacantikbanget's Avatar
    acacantikbanget Posts: 2, Reputation: 1
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    #1

    Apr 5, 2012, 02:37 AM
    accounting, bonds
    Book name: accounting principles 9th edition problem :- BYP15-4 chapter 15
    On January 1, 2008, Carlin Corporation issued $2,400,000 of 5 year, 8% bonds at 95; the bonds pay interest semiannually on July 1 and January 1. By January 1, 2010, the market rate of interest for bonds of risk similar to those of Carlin Corporation had risen. As a result the market value of those bonds was $ 2,000,000 on January 1, 2010-below their carrying value. Andrea Carlin, president of the company, suggests repurchasing all of these bonds in the open market at the $2,000,000 price. To do so the company will have to issue $2,000,000 (face value) of new 10-year, 11% bonds at par. The president asks you, as controller, “What is the feasibility of my proposed repurchase plan?”
    Instructions:
    (a) What is the carrying value of the outstanding Carlin Corporation 5-year bonds on January 1, 2010? (Assume straight-line amortization.)
    (b) Prepare the journal entry to retire the 5-year bonds on January 1, 2010. Prepare the journal entry to issue the new 10-year bonds.
    (c) Prepare a short memo to the president in response to her request for advice. List the economic factors that you believe should be considered for her repurchase proposal.


    PS: please help me... ;(
    Curlyben's Avatar
    Curlyben Posts: 18,514, Reputation: 1860
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    #2

    Apr 5, 2012, 02:55 AM
    Please refer to this announcement
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    We won't do your homework questions for you.
    You were given the assignment for you to learn.

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    acacantikbanget's Avatar
    acacantikbanget Posts: 2, Reputation: 1
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    #3

    Apr 6, 2012, 02:46 AM
    Quote Originally Posted by Curlyben View Post
    Please refer to this announcement

    You know accounting? Can you help me?
    Correct me if I'm wrong

    Debit Cash
    Credit Bonds payable

    But how can I calculated it?
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